Research On The Effect Of China’s Shipbuilding Market-oriented Debt-to-equity Swap

At the end of the last century,my country led the first round of policy debt-to-equity swaps.This round of debt-to-equity swaps was guided by the government.The main target companies for equity swaps were companies that were in financial distress or on the verge of bankruptcy.The main purpose was to solve the problems of large state-owned banks.The problem of high non-performing assets ratio.Since 2016,my country has started the second round of market-oriented debt-to-equity swaps.The difference between this round of debt-to-equity swaps and the previous round is that the government no longer intervenes,and the targets of the swaps can be companies that are temporarily in financial distress or normal companies.For enterprises that operate,the market-oriented debt-to-equity swap method,assets,and pricing are all determined by the market itself,showing the characteristics of marketization and legalization.With the continuous advancement of market-oriented debt-to-equity swaps,more and more companies want to take advantage of this wind,reduce corporate debt,and reduce corporate leverage.The leverage effect is not obvious,the pricing mechanism is not perfect,etc.Therefore,the research on market-oriented debt-to-equity swaps is still of great significance.This paper takes the debt-to-equity swap of China’s shipping market as a typical case and makes a concrete analysis of it.First of all,summarize the existing literature review at home and abroad,summarize the relevant researches on debt-to-equity swap at home and abroad,understand the relevant concepts and theoretical basis of debt-to-equity swap and its effects,and consolidate the theoretical basis of this study.Secondly,it emphatically introduces the development process of debt-to-equity swap in China,and analyzes the main motivations of the marketization of Chinese ships in this round.It concludes that national policies,industrial difficulties and financial conditions are the main driving factors of this round of marketization debt-to-equity swap,and the specific operation process of this round of marketization debt-to-equity swap.Including the implementation of the main body,operation process,pricing mechanism and exit mechanism of the study,explore the problems in the market-oriented debt-equity swap process of Chinese ships and the process worth optimizing.Finally,the event study method is used to analyze the stock price before and after the announcement date of market-based debt-to-equity swap,explore the market effect caused by market-based debt-to-equity swap of enterprises,and establish an evaluation system based on entropy method and grey relational degree method to compare the financial indicators before and after market-based debt-to-equity swap.This paper analyzes the influence of market-oriented debt-to-equity swap projects on financial performance,calculates the enterprise value after market-oriented debt-to-equity swap by WACC model to analyze the change of corporate governance effect,and highlights the significance of debt-to-equity swap by Chinese ships.The market-oriented debt-equity swap of Chinese ships has successfully helped enterprises out of financial difficulties,but there are some problems such as greater risks for investors.It is suggested that when other similar enterprises carry out market-oriented debt-to-equity swap projects,they should carefully choose the subject of debt-to-equity swap,formulate a perfect mechanism,and combine the long-term development of enterprises.This study has successfully verified the effect of market-oriented debt-to-equity swaps on Chinese ships,providing a reference for future market-oriented debt-to-equity swaps for similar enterprises.